Publication 554
Older Americans' Tax Guide

For use in preparing 2002 Returns

Important Changes for 2002

Standard deduction.   For most people, the standard deduction has increased. See Standard Deduction, later.

Earned income credit.   You may be eligible for the credit if you earn less than:

1. $29,201 ($30,201 if married filing jointly) and have one qualifying child living with you,
2. $33,178 ($34,178 if married filing jointly) and have more than one qualifying child living with you, or
3. $11,060 ($12,060 if married filing jointly), do not have a qualifying child, and are at least 25 years old and under 65.

For more information, see Earned Income Credit, later.

Important Reminders

Tax return preparers.   Choose your preparer carefully. If you pay someone to prepare your return, the preparer is required, under the law, to sign the return and fill in the other blanks in the Paid Preparer's area of your return. Remember, however, that you are still responsible for the accuracy of every item entered on your return. If there is any underpayment, you are responsible for paying it, plus any interest and penalty that may be due.

Third party designee.   You can check the Yes box in the Third Party Designee area of your return to authorize the IRS to discuss your return with a friend, family member, or any other person you choose. This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the processing of your return. It also allows your designee to perform certain actions. See your income tax package for details.

Employment tax withholding.   Your wages are subject to withholding for income tax, social security tax, and Medicare tax even if you are receiving social security benefits.

Voluntary withholding.   You may be able to have federal income tax withheld from your social security and equivalent railroad retirement benefits. See Tax Withholding and Estimated Tax under Social Security and Equivalent Railroad Retirement Benefits.

Photographs of missing children.   The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Introduction

The purpose of this publication is to provide a general overview of selected topics that are of interest to older Americans. The publication is divided into chapters to help you determine if you need to file a return and, if so, what items to report on your return. Each topic is discussed only briefly, so you will find references to other free IRS publications that provide more detail on these topics if you need it. Later in the Introduction, we also will explain how you can order large print tax forms or get help from a Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), or American Association of Retired Persons (AARP) program in your area.

Table I-1 has a list of questions you may have about filing your federal tax return. To the right of each question is the location in this publication where you will find the related discussion. Also, at the back of this publication there is an index to help you search for the topic you need.

While most federal income tax laws apply equally to all taxpayers, regardless of age, there are some provisions that give special treatment to older Americans. The following are some examples.

• Higher gross income threshold for filing. You must be age 65 or older at the end of the year to get this benefit. (You are considered 65 on the day before your 65th birthday. Therefore, you are considered 65 at the end of the year if your 65th birthday is on or before January 1 of the following year.)
• Higher standard deduction. If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. (You are considered 65 at the end of the year if your 65th birthday is on or before January 1 of the following year.)
• Credit for the elderly or the disabled. If you qualify, you may benefit from the credit for the elderly or the disabled. To determine if you qualify and how to figure this credit, see Credit for the Elderly or the Disabled, later.

Return preparation assistance.   The IRS wants to make it easier for you to file your federal tax return. You may find it helpful to order large print tax forms or visit a VITA, TCE, or AARP site near you.

Large print tax forms.   For easier reading and to practice preparing your return, you may order large print tax forms. Use them as worksheets to figure your tax, but do not file them. Call 1-800-829-3676 and order:

• Publication 1614 , which contains Form 1040, Schedules A, B, D, E, EIC, and R, and Forms 1040-V and 8812, and their instructions, or
• Publication 1615 , which contains Form 1040A, Schedules 1, 2, 3, and EIC, and Form 8812, and their instructions.

When you file your actual return, do not send the large print tax forms to IRS. Use the standard forms.

To order other free publications and forms, see chapter 7 in this publication.

Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE).   These programs provide free help for low-income taxpayers and taxpayers age 60 or older to fill in and file their returns. For the VITA/TCE site nearest you, contact your local IRS office.

For the location of an American Association of Retired Persons (AARP) Tax-Aide site in your community, call 1-888-227-7669 or 1-877-227-7844. When asked, be ready to press in or speak your 5-digit zip code. Or, you can visit their web site on the Internet at
www.aarp.org/taxaide/home.html.

Comments and suggestions.   We welcome your comments about this publication and your suggestions for future editions.

You can e-mail us while visiting our web site at www.irs.gov.

You can write to us at the following address:

Internal Revenue Service
Tax Forms and Publications
W:CAR:MP:FP
1111 Constitution Ave. NW
Washington, DC 20224

We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

Table I-1, What You Should Know About Federal Taxes

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